Dormancy Flow
Market cap divided by annualized dormancy value (CDD in USD). When Dormancy Flow drops below key thresholds, it has historically identified historically significant accumulation zones.
What is it?
Dormancy Flow, created by David Puell, divides Market Cap by annualised Dormancy (Dormancy = CDD / daily BTC transfer volume, annualised × 365). The simplified calculation is: Dormancy Flow = Supply / (365 × Dormancy), as price terms cancel out. It measures 'network value per unit of time spent'. High Dormancy Flow means capitalisation is large relative to the average age of BTC being transferred - the market highly values the network while old holders remain inactive. Low Dormancy Flow indicates old coins are being spent proportionally to valuation.
How to read
Dormancy Flow must be read on a log scale - values span several orders of magnitude. Low phases (historical percentile troughs) coincided with major market bottoms, marking old coins move massively relative to network valuation. High phases suggest capitalisation is growing without dormant coin activation - a healthy bullish phase. Trend and relative position within its own history are more informative than any absolute value.
Key zones
The original absolute thresholds published in 2018 (below 250K = trough, above 2M = overheat) are obsolete since the secular growth of network capitalisation and average coin age. Contemporary values span several orders of magnitude. Recommended reading: (1) track the position within the 4-year historical percentile, (2) watch for regime transitions on the log scale, (3) confirm readings with Supply-Adjusted CDD and Reserve Risk.
What to observe
Dormancy Flow's trend is more informative than its absolute value. Rising Dormancy Flow marks a phase where valuation appreciates faster than dormant coin activation. The reversal of this trend (beginning of decline after a bullish phase) warrants particular attention.
Historical context
Dormancy Flow coincided with the 2012, 2015, late 2018, and mid-2022 troughs. In on-chain literature, it is considered one of the most studied metrics for contextualising advanced capitulation conditions. Its track record on tops is less conclusive.
Expert notes
Dormancy Flow normalises CDD by transaction count, making it more robust than raw CDD against volume artefacts (a single large movement vs. many small ones). Division by TX count captures 'average dormancy per transaction' rather than total destruction, offering a cleaner reading.
Common mistakes to avoid
Dormancy Flow does not directly measure market sentiment. Low Dormancy Flow does not mean 'the market is pessimistic' but that old coins are moving significantly relative to capitalisation. The reason (capitulation, reorganisation, ETF migration) requires complementary contextual analysis.
Programmatic access
REST API
curl -sS \
'https://api.trinityinsights.io/api/v1/onchain/dormancy-flow/history?days=90' \
-H 'X-API-Key: $TRINITY_API_KEY'MCP server
{
"tool": "get_chart_value",
"metric_id": "dormancy-flow",
"timeframe": "1y"
}Required tier: pro. See the pricing grid for the tier list and the MCP documentation for multi-client configuration.
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Institutional disclaimer
Trinity Insights is an educational and analytical tool. The metric above does not constitute investment advice. Trinity Insights is not a Crypto-Asset Service Provider (CASP) registered under MiCA Regulation (EU) 2023/1114. See the full disclaimer.